Three Parties Interested: GoFirst Receives the Final Insolvency Timeline Extension

As the airline fails to get back in the air within the insolvency time limit, the CIRP has been extended for the fourth time. This time, it has been extended until August 3. This one is the final extension. If the airline fails to get a new owner before this date, its game will be over.

NCLT Extends GoFirst Insolvency Timeline

On June 12, the National Company Law Tribunal (NCLT) extended the Corporate Insolvency Resolution Process (CIRP) timeline for GoFirst by 60 more days. The new deadline is August 3. On June 3, the previous deadline expired.

RP informed the NCLY that the airline has received interest from three more parties. In addition, the current parties have revised their offers after the Delhi High Court order directing DGCA to deregister the aircraft. Hence, the lenders requested an extension of 60 more days.

However, the bench has said that this is the final extension. NCLT criticized the Resolution Professional (RP) for repeatedly requesting extensions without showing any concrete progress in the resolution plan. Usually, companies do not receive this much extension, but CIRP aims to revive the airline. Hence, the final extension has been granted. However, this has not been included in the record.

According to IBC 2016, a resolution process should be concluded within 180 days. The NCLT has the provisions to stretch this period to and beyond 330 days. For GoFirst, 330 days ended in April month. However, NCLT is using its discretionary power to ensure that the airline is revived.

Airline Remains With Nothing

At present, the Air Operator Certificate (AOC) may be the only asset remaining with GoFirst. Initially, the airline lost its IATA designation. Gradually, it lost the aircraft, airport slots, CEO, and employees, and will soon lose its foreign rights permanently.

After the Delhi High Court order directing the Directorate General of Civil Aviation (DGCA) to deregister all the aircraft of GoFirst, the airline lost its entire fleet. With aircraft no longer registered within India, lessors can claim their assets back.

In India, if an airline fails to utilize its airport slots for 12 months, they are considered as lapsed and are relocated to a different airline. All the domestic slots of GoFirst have been distributed to other airlines. It had many prized slots at Mumbai Airport.

International flying rights held by the airline have been temporarily allocated to other airlines like Air India and IndiGo. However, if there is no progress in the insolvency process, they may be allocated permanently. Akasa Air is looking at the prized 14 slots at Dubai Airport, which were previously held by GoFirst.

Moreover, Nishant Pitti, who had placed a bid to acquire GoFirst has withdrawn his bid. Now, Ajay Singh and Sky One remain the only two bidders.

Conclusion: Extension of CIRP Timeline for GoFirst

GoFirst has received yet another extension in its CIRP process, in hopes of getting back into the air. NCLT criticized the RP that the lenders can not just pass the provisions at any time and request an extension. NCLT has used its discretionary powers to give this extension. Three more parties are interested in the airline.

What do you think about the future of the airline? Discuss in the comment section.